Can dividends outpace rising inflation?

Caspar Rock, deputy CIO, Architas Multi Manager Dividends are a function of profit growth, profit margins, and payout ratios. Currently, forecast profit growth is ahead of forecast inflation for the next few years, and so provides potential for upside. Profit margins across most industrial sectors have held up pretty well, both into the downturn and into the recovery as most companies cut costs aggressively in what has been described as the ‘SAP recession'. This means that dividends have held up fairly well in these types of companies.  In two important sectors this is not the case, fir...